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Headquartered in Reston, Virginia, Leidos Holdings Inc is an American defense company that provides scientific, engineering, technical, and systems integration services. It operates in four main segments: defense solutions; health, energy, and civil solutions; cybersecurity solutions; and corporate solutions.
Headquartered in Reston, Virginia, Leidos Holdings Inc LDOS is an American defense company that provides scientific, engineering, technical, and systems integration services. It operates in four main segments: defense solutions; health, energy, and civil solutions; cybersecurity solutions; and corporate solutions.
The company's customer list is impressive, including the U.S. Department of Defense, the U.S. Department of Homeland Security, and the U.S. Intelligence Community which includes the National Security Agency (NSA).
Let's take a look at why investors should watch out for LDOS.
Impressive Zacks Rank
Currently, Leidos is sitting confidently at a Zacks Rank #2 (Strong Buy), spurred by recent positive earnings estimate revisions. Over the past 60 days, current quarter estimates have risen from $0.63 per share to $0.66, while current year estimates have increased from $2.72 to $2.75 per share.
Investors should take not that Leidos' industry, Aerospace/Defense, is 42 of 265 total industries ranked on the Zacks Industry Rank, falling in the top 16%. This suggests good standing at the beginning of a new year, especially in comparison to other industries out there.
Strong Style Scores
In addition to a Strong Buy ranking, Leidos' Zacks Style Scores are very notable.
Growth
Boasting an 'A' in this category, the company is seeing current cash flow growth of 277.01% and projected EPS growth of 4.79%. Its return on equity, from the past 12 months, is 21.08%
Value
Despite a score of 'B,' Leidos still has strong Value scores. Its Price to Cash Flow (P/CF) ratio is 5.39, with a Price to Earnings (P/E) ratio of 18.34 and a Price to Sales (P/S0 ratio of 0.77.
Momentum
Like its Growth Score, Leidos has an 'A' ranking in the Momentum category. Compared to its industry, the defense company is excelling, with both a positive 12 week price change of 18.73% and estimated quarterly EPS change of 6.59%.
Future Contracts
In December, Leidos was awarded a prime contract by the U.S. Special Operations Command (USSOCOM) to provide intelligence, surveillance, and reconnaissance (ISR) solutions including hardware and modifications; specialized communication solutions and networks; signals processing capabilities; and systems integration.
Because the defense industry is highly competitive, it is important for companies like Leidos to secure work contracts for present and future time frames. Since the company works primarily with the United States' Federal government, Leidos fortunately has a steady stream of work coming in.
Bottom Line
Leidos Holdings may face serious competition within its industry, which includes big names like Boeing Co BA and Lockheed Martin LMT , but they are the only company that holds a 'Strong Buy' ranking on the Zacks Rank. Right now, LDOS is a fantastic growth and momentum stock to add to your portfolio, and one that should not be overlooked.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
